Potsdam Conference

After V-E Day, a new President and cabinet faced the issues of reparations, restitution, and the reconstruction of war-shattered Europe. At the Allied Conference at Potsdam in July and August 1945, President Truman, British Prime Ministers Churchill and Attlee (who succeeded Churchill mid-way through the Conference), and Soviet Marshal Stalin and their top political advisers became engaged with the looted assets issue as they agreed upon policies for dealing with a defeated Germany. The issue of German external assets (assets outside of Germany)--estimated by U.S. experts in mid-1945 at nearly $750 million (nearly $6.7 billion today)--and the monetary gold ($579 million) thought to have been looted from the central banks of the occupied nations of Europe came up for high-level decision-making, along with the more general questions of reparations from Germany and the resources needed to reconstruct Europe after the War. The Allied Control Authority managing occupied Germany had a key role in American planning for the handling of external assets and looted gold. It would also provide the legal authority for claiming custody over Germany's external assets. American planning continued to emphasize the essential Safehaven security objective of denying such external assets to any groups seeking to resuscitate Nazism.

During the Potsdam Conference, Allied experts abandoned an American proposal for a Four-Power declaration assuming custody of the German assets located in neutral nations. They settled instead for an undertaking by Truman, Attlee, and Stalin assigning to the Allied Control Council the control of the disposition of these assets-along with a decision by Stalin not to claim for the USSR any of the assets located in Western Europe. In the weeks following the Potsdam Conference, American policy-makers favored the issuance by the Allied Control Council for Germany of a vesting decree under which it would claim legal authority for the German assets in neutral countries. President Truman directed that such a decree be sought. The debate over the decree, finally issued by the Council in November 1945 as Allied Control Council Law No. 5, sharply divided the Allies and even American policy-makers over the viability of such an assertion of authority under international law and its overall effectiveness in dealing with neutral states.

Truman, Churchill, and Attlee also reached agreement at Potsdam on a common policy for the disposition of the monetary gold found in Germany (estimated to be at least $250 million in the U.S. Zone alone, some $2.4 billion today), as well as the gold that Germany had sold abroad to finance its war machine. They adopted an American proposal to establish a "gold pot" into which the Allies would collect all the looted monetary gold from Germany and from the neutrals, and distribute the resulting amount to the former occupied nations from whose central banks monetary gold had been looted. (By "monetary gold," the Allies had in mind gold that had been wrongfully removed from central banks--as distinct from "non-monetary" gold owned by individuals). Stalin unilaterally abandoned all claims to the gold found by his Western Allies (but of course the Soviet Union controlled and plundered much of the remaining wealth of the countries the Red Army occupied).

At the 18-nation Paris Reparations Conference in November and December 1945, the Allies agreed on more detailed policies based upon the Potsdam undertakings for the collection and distribution of looted monetary gold, and the liquidation of German assets located in neutral nations. The concept of a Gold Pool was confirmed, with the United States, Britain, and France to assume responsibility for managing its resources and distributing its proceeds through a Tripartite Gold Commission (TGC). On the basis of an American proposal, the conference also agreed on a fund of at least $25 million ($222 million today) for the support of "non-repatriable persons"--a concept clearly intended to include the Jewish survivors of Nazism as well as other victims without a government to which they could turn. With the strong backing of President Truman, the fund was to be made up of the non-monetary gold found in Germany by the Allied occupation forces, together with some share of proceeds from German assets to be ceded by neutral nations in forthcoming negotiations. The June 1946 Five-Power Conference on Reparation for Non-Repatriables also recommended that heirless assets belonging to victims of Nazi crimes be added to this fund.

Source: The United States State Department
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